My professional career has focused on how companies and their people can operate in both a principled and profitable way. I am the author of HOW: Why HOW We Do Anything Means Everything published by Wiley & Sons in an Expanded Edition in September 2011 with a Foreword by President Bill Clinton and a new preface. I am the founder and CEO of LRN. Since 1994, LRN has helped hundreds of companies simultaneously navigate complex legal and regulatory environments and foster ethical cultures. I am a Harvard Law School graduate who also earned a bachelor’s and master’s degree in moral philosophy from UCLA and a BA with honors in philosophy, politics, and economics from Oxford University. To learn more about my company, visit www.lrn.com. To learn more about the HOW philosophy, visit www.howsmatter.com.

(Almost) Everything We Think About Employee Engagement is Wrong

For years, the business world’s approach to managing employee engagement has been out to lunch.

“Out to lunch” as when executives tell managers to get their employees “more engaged” by taking them out to Olive Garden more often.

Survey statistics drive home our engagement ignorance. For years, employee engagement scores have declined despite the millions of dollars companies invest to boost sagging workforce morale. Engagement experts and practitioners continue to make commendable and reasoned efforts to encourage companies to better focus on and improve their engagement. Many of these professionals have been quite thoughtful in their approaches. That being said, shouldn’t we see scores improving? Unfortunately, a recent Towers Watson survey indicated that nearly two–thirds of U.S. employees are not fully engaged in their work and are less productive as a result. In response to survey results like this, executives exhort managers to spend even more time with their employees.

What if the lunch is disingenuous, boring, cheesy or even nasty? What if the additional time employees spend with their managers is tortuous and mundane rather than constructive, collaborative and inspirational? We know all too well what happens: employee engagement keeps plummeting, as it has for years. Once again, we’ve been applying a “how much” solution to a “HOW” problem.

The frequency of lunches, performance reviews, volunteer program outings and team-building exercises does not produce higher levels of employee engagement. Employee engagement is determined by the quality and meaningfulness of these interactions, and the journey managers are enlisting their employees to engage in. Thanks to a much deeper statistical analysis of more than 2 million workplace observations from employees around the world we now know:

A) The specific organizational qualities that must be present in high amounts and must truly animate leadership, decision-making and behavior throughout the company to create “super-engaged” employees; and

B) When employees are super-engaged, they exhibit many more specific “engagement traits” – including a willingness to put in a great deal of extra effort, increased loyalty, a greater willingness to recommend their company as an employer of choice, efforts to inspire others in the company through concrete comments and actions, and similar outcomes – compared to other employees.

This is a Eureka moment for employee engagement: we’ve cracked the code on what truly inspires employees. The source of engagement has nothing to do with breaking bread (or bread sticks) and everything to do with the extent to which trust, values and mission actually inspire and drive daily activities and interactions.

These determinants represent much deeper and more complex levers to pull, yet they’re also quantifiable and statistically valid. My company LRN conducted an independent statistical analysis of how things actually work at companies, small and large, derived from a lengthy and rigorous empirical study of observations from 36,000 employees in 18 countries conducted by the Boston Research Group, The Center for Effective Organizations at University of Southern California and Research Data Technology, Inc. When these observations were subjected to multivariate analyses – basically, the simultaneous observation and analysis of many, many outcome variables – the same result appeared every time. When trust, values and a purpose-driven mission exist to a statistically significant degree and guide leadership, decision-making and behavior, these “enablers” give rise to a highly inspired group of super-engaged employees.

The analysis also tells us that when trust, values and a purpose-inspired mission do not drive behavior in a company, far fewer of these engagement traits exist. Even worse, extremely low levels of these engagement sources produce a “disconnected” group of employees who work against or even sabotage company objectives.

Every organization has some supply of trust, values and mission; however, the research shows that the companies with super-engaged employees treat these core enablers as a reactor. When this reactor “heats up,” it produces truly inspired employees who want to build cathedrals rather than merely lay bricks.

Our existing approach to employee engagement only produces brick-layers: people who perform tasks for money; people who may briefly become more productive in these tasks via one-off awards, bonuses and other motivations (whose positive effects fade as quickly as sugar highs); and people who feel stuck in unsatisfying, dead-end jobs when they truly desire careers.

In fact, we have what I would call a full-blown, yet rarely talked about, “careers crisis” on our hands. Because so many workers remain dissatisfied, unproductive and – far worse – disconnected in uninspiring, task-based jobs, they are not driving the innovation and well-informed risk-taking that stimulates growth and creates additional, and more meaningful, jobs that our country needs. It’s time to go on a journey from task-based jobs to values-based missions.

By misunderstanding, mismanaging and mis-measuring employee engagement, we are failing to provide a signal to our nation’s most valuable resource: young workers. These people do not know where to invest their energy, talent, skills, character and creativity. They are looking for careers, but we can barely provide them with jobs.

By understanding the true source of super-engaged workers, our companies and their leaders can have their business lunches and enjoy what they eat during these collaborative, inspirational and productive sessions, too.

Further, by deploying trust, values and a purpose-driven mission as the primary drivers for all business activities, interactions and decisions, companies can transform a workforce of bricklayers into a highly coordinated and inspired team of cathedral-builders whose inspired work generates both success and significance for our companies and the world.

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The company I work for has very little engagement. The lack of recognition and appreciation tends to lower moral and I believe it’s come to a low. Not an all-time low as when we had our salary cut. Several months back I was given a project to do. After a couple document submissions to the supervisor with no feedback, I had decided to move forward and starting on another document. Then recently, I was made aware of a big presentation that was supposed to occur within the next several days. Never being given the go-ahead to start the project, my supervisor had written me a nasty email regarding how after several months I had done nothing with this project and all I did was make excuses, and if it was too difficult for me then he would find someone else. I was so furious. I ended up responding about how he never provided feedback, no team meetings, and I all have been doing is researching and writing up documentation. Because of the fact that a co-worker who had trained me from the first day I started that I was NEVER to play around with the system. Now I’m getting blamed for things I’ve been taught. This person doesn’t even know anything about our industry. I’ve had to face constant criticism for the past year and it’s been very unotivating. Now that this presentation will happen in a few days and they had decided to tell the people that they are in compliance with certain guidelines, I can’t help to hope that they fall flat on their faces and get caught in the lie. This company they’re presenting to can’t be that stupid. When an employer treats their employees in this manner all the employees want to do is tel the employer to F off. I almost did on Monday bc who needs that sort of treatment, especially those who are the hard workers. I know part of his has to be from being influenced by a lead employee who doesn’t know squat about these rules. So, engagement may be a good thing, but not for those who feel as though it’s no use when all you receive are put-downs, negative criticism, and no raises.

As a fairly disengaed employee at my current company here is my take on what companies should do to engage employees.

Company’s need to stop talking about engagement and start engaging employees. This means involving them in decisions. My company talks ad nauseam about how they want us to be engaged. But when you try to, the managers ignore you, tell you your idea is great, but… or worse take your idea \ work and present it to senior management themselves instead of letting you shine. Companies need to understand that in today’s “greed is good” and the CEO is king world, where profits matter more than people getting any level of engagment can only be done when the employee at least thinks their job is secure, their bosses respect them and that it “isn’t all about money”.

And finally, start paying your employees more. Raises and bonuses are important. I know, I know, surveys say that isn’t true, but people lie on those surveys. When people are compensated generously they really do feel more valuable to the company and will engage accordingly. When I first joined the workforce if you got a three percent raise it meant you were about to be fired. Now a three percent is a good raise. Meanwhile the CEO is making millions.

To bad they don’t teach alruism and generosity in MBA programs. Maybe they should.

My company has spent countless amounts of time, energy and money trying to get to the heart of the engagement question. A big part of the problem is that engagement is not something you can really do much about. It is either there or it isn’t. It is driven by a culture and an atmosphere that comes from the top that is in a company’s DNA. If those things do not exist then all the studies and initiatives in the world cannot help.

In our company the work on the engagement “problem” is being led by the HR department. That is a big part of the problem right there, as it has been my experience that while HR may be good at doing transactional things or may be poor at doing transactional things, transactional things are really all they have any business doing. Everything else they try to do seems destined to end up going nowhere, being completely irrelevant to people’s work lives, or worst of all, becoming just even more of an annoyance and burden to the workers who see it as not helpful and time-wasting. In our case the results have been endless surveys and committees trying to get to the core of the engagement issue, with zero results after 6 years.

In our company the employees are disengaged for several very well-understood reasons. They are generally not paid at levels commensurate with the degree of work and qualifications required for the jobs; wage increases have generally been minimal for the last several years; there is a large degree of inconsistency in compensation, recognition, and working conditions across business units; top management is seen as not working well together and instead being a bunch of ego-driven MBA bozos who do not really accomplish much; a number of very expensive, high-profile projects that management has pushed through over the last several years have been abject failures and not delivered promised results, yet nobody has been held accountable; and the CEO is seen as an uninspiring, weak leader who tolerates or even encourages this sort of behavior among his direct reports, just as long as he and his wife get to travel the world and go to awards dinners every so often.

All the surveys, staff barbecues and town hall meetings won’t do a damn thing in that environment. The odd thing is that this is generally known to everyone at all levels. Yet nobody from the top on down is willing to do a damn thing about it. Partly I guess that is because it would mean the CEO would have to admit to the Board of Directors that they have all been screwing around for the last few years. Admitting such things to the Board would tarnish the glittering reputation he has among that group. And the Board, like most Boards, really is out of touch with what is really going on in the company and doesn’t want to hear it anyway. If the Board won’t hold the President and management’s feet to the fire and demand better, how can anyone else in the company be expected to feel engaged?

I think of what our workplace could be like if the CEO and perhaps half the top management group could be replaced with a different group who had common sense and made better decisions. Sadly, with the MBA mindset that pervades companies these days, it seems that is impossible as long as we continue to reward all the wrong behaviors.

My heart goes out to you and your situations are what keeps me in this game. I know the solutions and proved them as an executive after I left behind command and control and adopted its opposite, call it autonomy and support.

That said, most executives don’t want to change. They believe they are where they are because of how they manage and so should continue using those techniques without regard for the effects on people and their company. They are their company’s worst enemies and don’t know it.

So your situations are pretty much the norm today, but there are exceptions. I encourage you to look for an exception and in the meanwhile don’t allow your situation to damage you in any way.

The sad reality is that the light at the end of the tunnel is the reflection of your smart phone off the puddle of water. The global market has offered companies many options, as to market and labour, most industries that stress the so called employee engagement tactic is financial and service. The reason they are not to concerned with employee attitude is the development of the consumer knowledge of finance and the embrace of technology. Companies are understanding that there are other ways to capture and keep customers by allowing and developing the use and ease of technology.

I also work at LRN and am thrilled to see this subject discussed by Dov Seidman. I strongly agree that the young workers just entering the work force want a career, they want to be part of something bigger than themselves, they want something more than a job. At LRN we do not have “managers”; we have “mentors”. i think the very term “mentor” conveys some of what I think is also missing. People who have such roles at companies have a moral obligation to mentor the newer workers by sharing wisdom, being sure to really listen to concerns and issues, and to really extend trust. But above all, I think Dov is right…real employee engagement comes from “deploying trust, values and a purpose-driven mission”.

Thanks to Dov and all those who have commented. You can clearly see the passion behind the viewpoints. I often wonder why employee engagement isn’t consistently viewed as a business imperative that is essential for market success. We’ve long heard from executives that “People are our strongest asset”. What I hear Dov saying is that “Super-engaged people are our strongest asset” and who could argue with that? Getting there is not an easy task and requires a combination of tools, frameworks and inspiring communication that ultimately ignite the behaviors of a healthy culture. And it is well worth the investment. In my work I have seen time and again that engaged employees from a strong culture have more direct impact on reputation, bringing a brand to life in the market and in creating exceptional customer experiences than most companies realize. We can’t miss this powerful connection from the inside out. Acting on it will make you fit to compete and the rewards will be great at the individual and organizational level!

I had the opportunity 25 years ago to work at Tandem Computers a people-oriented company that had one of the most engaged workforces in Silicon Valley at that time. Even today there is a 2500+ person strong alumni on LinkedIn, most of whom believe, 16 years after its demise as a standalone company and nearly a decade since it was merged back into HP, that working there was one of the best places they have ever worked and a highlight of their careers. This is an engaged group of people! For a long time I’ve been collecting stories of their experiences (recently published as Tandem Computers Unplugged, A People’s History) and have come to the conclusion that effective employee engagement is more than just values, it involves the interplay between leadership, corporate culture and technology. (the output that the company or groups or cross-functional teams produce) Values are central because they are the glue that ties each of these three elements together and must be in alignment with each and authentically reflected in the reality of how each element is executed day-to-day. Trust is just one of a number of corporate values that are critical. Another important one is shared success. I’m working on how to succinctly articulate the ‘lessons learned’ as the more I read these comments, the more I’m convinced that the lessons of Tandem are just as important today, in fact maybe more so, as they were over 25 years ago when the company was founded. Stay tuned!!

Interesting discussion. I think the real question is why aren’t more engagement efforts effective? Over the course of my career with a large corporation I worked countless engagement initiatives, managed learning and development and also led organizational effectiveness. I have put a lot of thought into this question and have ultimately come to the following thinking. Many of the commenters have hit on elements, however I think to really understand it, you have to look at the complete picture.

1) Stakeholder vs Shareholder focus. For any company to successfully maintain a highly engaged workforce, they must value all of their stakeholders and believe that their business will only be successful to the extent that it creates value for all stakeholders, not just the shareholder. In a company where the balance is overtly swayed toward the shareholder, efforts to work on engagement will feel inauthentic. A successful engagement effort requires that the company leadership actually believes that improving employee engagement will directly impact the success of the business. Working on employee engagement is one of the most powerful levers, as the employee is the one stakeholder that has the ability to directly impact all others: customers, suppliers, partners, communities and investors. Highly engaged employees generally create much happier customers. 2)The second reason that I think so many efforts struggle is that Engagement is generally thought of in too narrow of terms, and is often overly associated with working on ‘soft’ things such as employee appreciation and ‘fun’ events. Every engagement effort should be grounded in a high level model of what people actually want from their jobs. Most people want to apply their strengths toward making a valued impact on something that they believe is important. Said differently, they want to be Inspired, Empowered and Respected. The whats and hows underneath each of these elements will vary by the person, by the business and even by level. Inspiration can come from working in a business with a clearly defined and well articulated purpose (other than making money.) It can also come from a passion for an industry, technology or the client that is served. Or simply from tackling interesting and challenging problems. Empowerment is critical, as people naturally want to make an impact! They want to get things done, solve problems and help customers. Do they have the tools, training, resources and support to be able to go home most days with the satisfaction that comes from knowing that you’ve moved the ball forward? And finally, people want respect… to feel that their contribution and their person is valued. Interestingly, often we go right to reward and recognition programs to achieve this. In actuality it’s often more about the culture and day to day interactions that make a person feel valued. A culture where leaders listen, provide personal thanks and empower their people, will almost certainly result in employees that feel respected. 3.)The final reason that I think so many engagement efforts are not effective is what I call, “working to the survey question.” The typical drill is the results come back from the survey, are graphed to determine the questions with the largest gap to whatever benchmark is being used, and then programs are defined to go off and ‘fix’ the shortfall. We fix the symptom, without necessarily stepping back and looking at the information as a whole to understand the disease. Using the model I suggest in my second point, looking at a hypothetical survey question regarding communication relative to how it is affecting your ability to inspire, empower and respect employees, would likely lead to the identification of much more robust and sustainable actions.

I think the biggest mystery in all of this is why more businesses don’t recognize the opportunity available to them through a more aligned and engaged workforce. Thanks Dov for keeping focus on this very important topic.